ATO hunts 32yrs of foreign buyer records

Anyone that still believes that the Australian Tax Office (ATO) is not serious about cracking-down on illegal foreign investment into Australian property needs to re-think their position.

As revealed by Treasurer Scott Morrison last month, the ATO has been manned with 50 enforcement officers and has sophisticated systems and detailed data matching capabilities at its disposal. Already, the ATO has launched investigations over 1,044 cases of potential illegal foreign investment of which 532 cases are currently under active investigation, with investigations likely to balloon now that the amnesty on illegal foreign buyers has finished.

Today, the ATO has lodged a notice in the Government Gazette (see here), which has demanded 32 years of detailed transaction history from Australia’s state and territory land titles offices and rental boards, in order to create a new central depository of data on property ownership.

Below is the information that the ATO is seeking, which is quite detailed:

Rental Bond Authorities

Rental bond number of identifier for rental bond

Unique identifier for the landlord

Full name of the landlord

Full address of the landlord

Date of birth of the landlord

Contact telephone numbers for the landlord

Unique identifier of the managing agent

Full name of the managing agent

Full address of the managing agent

Unique identifier of the rental property

Full address of the rental property

Period of lease

Commencement and expiration of the lease

Amount of rental bond held

Number of weeks the rental bond is for

Amount of rent payable for each period

Period of rental payments (weekly, fortnightly, monthly)

Type of dwelling

Number of bedrooms

Revenue and land title authorities

Date of property transfer

Full street address of the property transferred

Municipality identifier of the property transferred

Property sale contract date

Property sale settlement date

Property land area

Property sub-division date

Total property transfer price

Land usage code

Transferor’s full name

Transferor’s full address

Transferor’s share percentage and manner of holding

Transferor’s date of birth

Transferor’s Australian Company Number (ACN) or Australian Business Number (ABN)

Transferee’s full name

Transferee’s full address

Transferee’s property share percentage and manner of holding

Transferee’s date of birth

Transferee’s ACN or ABN

Land tax and applicable exemption details

Purchase duty and applicable exemption details

Valuation details

The ATO explains the purpose behind obtaining the data as follows:

The purpose of this data matching program is to ensure that taxpayers are correctly meeting taxation and other program obligations administered by the ATO in relation to their dealings with real property. These obligations include registration, lodgment, reporting and payment responsibilities…

Based on current data holdings it is estimated that records relating to 11.3 million individuals will be matched…

The objectives are to:

obtain intelligence about the acquisition and disposal of real property and identify risks and trends of non-compliance across the broader compliance program

identify a range of compliance activities appropriate to address risks with real property transactions by taxpayers

work with real property intermediaries to obtain an understanding of the risks and issues, as well as trends of non-compliance

gain support and input into compliance strategies to minimise future risk to revenue

promote voluntary compliance and strengthen community confidence in the integrity of the tax system by publicising the outcomes of the data matching program

Obviously, having robust data will make it much easier for the ATO to prosecute illegal activity under the new foreign investment enforcement regime, which came into effect on 1 December (see here for an overview).

And with it, the illegal foreign buyers and their accomplices that have helped price-out young Australians from home ownership will have nowhere to hide.

Yeah, like the ATO note itself. Only idiots like the property writers at Domain think it’s targeted exclusively at foreign buyers.

“The purpose of this data matching program is to ensure that taxpayers are correctly meeting taxation and other program obligations administered by the ATO in relation to their dealings with real property. These obligations include registration, lodgment, reporting and payment responsibilities. “

It is more a matter of non-recording in historical data and crappy data entry. Addresses don’t align with parcels.
Part of the problem is they privatised part of the system without a proper data entry system.

Telstra did a data cleanup on addresses and geocoded them in the mid’90’s so maybe a government order to get their data will be a start? Just the address details married to the gps records is all that is needed to start

Sydney agent Michael Pallier said in the past week alone he has sold two new apartments and shown a A$13.8m (US$10.3m) house in the harbourside city to Chinese buyers looking for an alternative to stocks.

“A lot of high-net-worth individuals had already taken money out of the stock market because it was getting just too hot,” Pallier, the principal of Sydney Sotheby’s International Realty, said. “There’s a huge amount of cash sitting in China and I think you’ll find a lot of that comes to the Australian property market.”

The ATO will collect a huge whack of avoided tax (and add penalties) to help balance the budget. There are going to be a lot of very surprised landlords getting a nasty tax assessment in the post soon.

Secondly, the illegal foreign buyers will be scalped for cash to fill the Treasury’s endless deficit forecast.

This is going to cause some serious ructions in the property market as speculators ditch properties to pay tax bills and, in understanding this means a wave of stock about to flood the markets, will want to get out pronto. Capital gains are about to become capital losses.

Agreed. It’s much bigger than just foreign buyers. I know at least three people who are falsely declaring rental income on their holiday houses so they can claim losses and expenses – they will be worried by this news.

Yes! This was my first though! How many landlords claiming PPOR status will get challenged when the data turns up bonds and tenancy agreements with inconvenient dates?

I love it!

The ATO are the only govt department who have the capability and fortitude to do this work. they can be a real pain in the arse for small business (and often are) but are just rigid enough to start and finish the job.

This was always going to happen, they told everyone the rules of engagement from the very beginning…. Now its time to rape the rewards from those that chose to ignore the rules……… only problem is how far will this beast go !! why 32 years worth of data ?

Whilst i applaud the move to collate the data so that we have a accurate picture of whats really going on, given its historical nature i doubt any penalties will be applied to any found to be in breach. The worst that may happen is if income was found to be generated and no tax paid. And then assuming the person in question is even still in the country.

Yeah understand Peachy, just a friend in Switzerland thought it might be bi-directional. Tax treaties however…… Don’t think China/Australia have one of those???? But most other countries do, so will ATO “share” this data with their international friends?

Well if its targeted at all property investors then its worth while and a different issue.
I was under the impression however that it was foreign property purchase/tax compliance.

The main point i was trying to make, which i worded badly was that if there is a historical malfeasance in regards to foreign property ownership, given that it occurred in the past the penalties they can inflict are minimal. The penalties have only just changed. I have not seen anything that makes the increased penalties retrospective.

@AngryMan – Yeah, I agree that there probably won’t be a massive issue for past foreign owners. I do think this may be the start of a big crackdown on property investors though and the should be worried about their possible past transgressions.

Unless the foreign owners bought during a period when they were permitted to do so without approval they are in breach of the foreign investment laws if they did not have approval.

There could be a lot of divestment orders on the cards once the ATO cross references property ownership with tax status. If someone is listed as an owner and has never lodged a tax return in Australia they will be of interest.

At the risk of sounding like I’m defending the illegal acquisition of land and the dwellings on them (which I’m not), but is the expense of collecting all these reams of data really worthwhile – is this a productive use of taxpayer dollars, and the time of those who will have to search through records to provide all this information.

11.3m individuals – thats a compliance process that involves half the country

Just throwing it out there that the government might have more important priorities – the risks to the financial system, the property bubble itself and our obsession with the FIRE economy long pre-date the undeniable uptick in foreign buying

I don’t think it’ll cost a lot. The 11.3 million refers to the number of taxpayers the ATO has on file, and it’ll be data matched. If the name is NOT on there, and you’re the owner of an Australian property, then there’s a high probability the property is foreign owned.
It will be a huge revenue stream, may even pay for the 1 billion dollar ‘investment fund’

Hi Jordan. The effort involved in data matching 11M records is not a lot greater than data matching 1100 records. The computers do all the work. So sure, at some stage human intervention is involved, but they will prioritise these according to likelihood (that an offence has occurred) and impact (the amount of money involved, and the likely return to the taxpayer).

And I would also expect that anyone above a certain threshold will get a “please explain”. As the spouse of a tax agent it is amazing how many people seek expert help when they get one of these……

Yup – clean up the data – organise it in a dozen different ways, easily done, then simply write as many matching algorithms as you want to run over it. Damn a good team could get that sorted in a few weeks.

Well, early this year I made a comment somewhere on MB ( did not bother digging it up) where I quoted that “ato is on the case” :-). I can now be rest assured that my source is/was genuine.

They are going to extreme length (in terms of state-of-the-art methodologies, eg: computer vision) to weed out this mess, their main targets landlords (neg. gearing) and foreign buyers. I genuinely suspect they are gearing-up/arming themselves for a policy change, so that when that policy change happens then it can be actioned within 24hrs. Foreign buyer policy change has already started, next in line in neg. gearing.

Yeah I said similar at the time the tradies gst scam was uncovered. This is going to peel the scab back on a whole bunch of issues. The please explain letters will be generated shortly, but I’m surprised they are looking back 32 years. It just shows that you need to keep your tax records for life.

That’s right Robert. However, there is nothing in the legislation which prohibits the ATO from going back further as they have done with the foreign investment review. The five year record keeping was determined out of convention rather than a legal requirement. For example, if the ATO inspects your records and each five years has been incorrect, they are able to go back further so if you’ve discarded those records then their assertion becomes undefendable.

funny everyone is applauding to this populist xenophobic campaign that is not going to solve any problem. There are millions of illegal immigrants (people overstaying their visa) that make local unemployment high and none is willing to do anything to fix that because it benefits big businesses.

Numbers may be dodgy, but how many of these people over staying temp visas also own/rent properties??? A lot probably are in the share house world of Mike’s 20-40 per 2 bed apartment, but some are former student/457 visa who just forgot to leave.

There are 65,000 recorded illegal immigrants, 85,000 lost/overstay & 25,000 in special conditional visas – so 180,000 overstay illegal immigrants is a conservative estimate.
Borders Australia track over 573,000 overstay & missing or ‘reborn identity’ to give a scale to the issue – half a million fraud & flight risk

There are 1.7 million foreign immigrant guestworker visas issued.
See DIAC outline below.

A guestworker visa is exactly that : a guest our country that has visa conditions allowing them to work.

Of these 1.7 million
335,000 are ‘student’ visas, 650,000 tourists (including 249,000 that were students churning or delaying departure by being a student then tourist then student),
200,000 457 visas,
650,000 NZ visas which includes over 330,000 non NZ born so basically a non Aust non NZ foreign guestworker.

There is no doubt – no doubt at all with extensive evidence that many if not most off these 1.7 million are here only to work and almost all breach their visa conditions to do this. Many if not most see recruited in from the slums of Asia & India by racketeers and agents and are heavily indebted before they even arrive with the sole purpose to work, work excessively in many different identities and in massive blackmarket labor rings or vice syndicates. Exposure of the blackmarket labour rings (711, spotless) or prostitution and vice rackets has shown these to be exclusively and extensively rorting student & tourist visas.
They also breach false documents and health records (half the Indian records are shown as fake DIAC), they breach work rules, purpose in Australia, false declaration of funds and they breach morality, vice, corruption, blackmarket and other conditions one entry.

So the statement that there is millions of illegal immigrants in Australia is perfectly correct.
Nearly 200,000 declared illegals and well over 1 million if not closer to 1.5 million temp foreign guestworker visa holders acting illegally.

The whole back packer holiday visa and 457 rort drives up youth unemployment. So I’m not happy about that either.

Its got nothing to do with xenophobia but about looking after people who can actually vote for our crappy politicians rather than people (regardless of their country of origin) who are just here for a good time not a long time.

They are summed up by the lyrics of an old song “go on, take the money and run”

Xenophobia? What like when you close the door of your house to discourage the entry of strangers?

There is nothing xenophobic about restricting the purchase by foreign residents of existing residential dwellings. By definition they do not reside in Australia and generally have no intention of residing in Australia.

So what would be the basis of the fear that you claim is driving the concern?

Good …..put them through the ATO mincer ……….lots of folks both foreign and local who think they can flout the law will be about to learn that the law in Australia ,certainly any law that relates to collecting government revenue and taxes is not to to flaunted …………bring it on !
……….a lot of for sale signs appearing around Hornsby……………some trying to get out ……hope any breaking of the law and penalties can be applied even after you may have sold the properties ……….

225,000 Chinese owned dwellings ( that used to be Australian couple of family residences )
–
that have now been converted to slum doss house foreign guestworker hovels housing 8,10, 12 or more fake ‘students’ ‘tourists’ or 457 and NZ back door non NZ born third worlders.

–
1.7 milliion foreign guestworkers have sneaked In under lax if not totally corrupted visa scams to participate in blackmarket labour rings and vice”.

780,000 of these foreign guestworker are in sydney alone (1 in 6 people in sydney now (98% rent in an estimated 110,000 privately owned predominantly Chinese owned dwellings in sydney alone).

550,000 in Melb to a similar ratio.

The rest spread across the main state capital cities.

The Chinese landlord routinely declares about $500 in rent and then sublets or puts in a lead tenant and collects the other $2,200 or more each week as cash.

This is undeclared, no tax is paid, and is routinely sent back to China or out of the country as remittances or payment to the Chinese property purchasing syndicates, usually factory workers in China told they will get an Australian PR & Medicare if they participate in buying an Australian property as part of the racket.

The managing agents and building managers are routinely bribed as part of the scam. As well a the now routine rackets in proxy PR buyers being used as front people for the scams.

So the ATO could put 5,000 staff on it plus every investigative firm in Australia.

There are hundreds of thousands of examples.
But they will all have ‘fake records’ of rental payment and tenant lists.
–
The only way to get to the bottom of the great student & tourist visa racket is to inspect each and every visa candidate, collect data on wher they live in these doss house hovels, match that to the landlord details.

And then do a full police enforced sweep of every residence plus street, transit and building checks of every dwelling and visa candidate to see if they comply to building codes and also their visa conditions of entry.

And also all the Austrack wire service records, bank accounts and financial records of these Chinese and others (DYI super scamsters being the second wave driving up rents & property values) as well.
–
On a yearly basis 225,000 foreign Chinese owned hovels with the 1.7 million foreign guestworkers crammed in 8, 10, 12 or more into a typical 2 bed unit would have generated around $17 billion of underdeclared rent income (225,000 dwellings & $1,500 week undeclared x 52 = $17.550 billion) or about $170 billion over the last decade.

Most sent offshore or reinvested to buy more Australian housing to convert into doss house foreign guestworker slums.
–
So there is a sizeable scope for targeting,

I believe many of these properties should be confiscated in luie of breaches and taxation not being paid – and returned back to Australians as a social asset for our poor & vunerable who were most impacted by allowing this racket to occur.
–
It goes without saying the university’s, colleges & institutes that all knowingly participated in the visa rackets should also be investigated and prosecuted along with the fake tourist, 457 and NZ back door migration rackets that have flourished.

Up to 1.5 milliion of these foreign guestworkers will be found to be fraudulent, only recruited here to steal jobs, work in major blackmarket labour rings or vice & prostitution.

That is a very reasonable assumption based on the massive collection of evidence that DIAC and others already have and which has been extensively reported in the media.

–
So in my view all the government agencies need to be engaged, ATO, Border Control, federal and state police & councils.

Australian citizenry should also be given powers to stop, inspect and detain foreign guestworkers that are reasonably suspected of breaching visa conditions of entry or participating in some criminal or illegal activity.

Borders Australia track over 573,000 overstay & missing or ‘reborn identity’ to give a scale to the issue – half a million or a third are involved in fraud, suspect activity or risk to Australia.

A guestworker visa is exactly that : a guest our country that has visa conditions allowing them to work.

Of these 1.7 million 335,000 are ‘student’ visas, 650,000 tourists (including 249,000 that were students churning or delaying departure by being a student then tourist then student), 200,000 457 visas, 650,000 NZ visas which includes over 330,000 non NZ born so basically a non Aust non NZ foreign guestworker.

There is no doubt – no doubt at all with extensive evidence that many if not most of these 1.7 million are here only to work and almost all breach their visa conditions to do this.

Many if not most are recruited in from the slums of Asia & India by racketeers and agents and doing literally 8 year old level ‘English courses’ they could do for free in their home country or 14 year old ‘Vet or higher education’ courses specially dumbed down for the visa trade & collusion.
Most if not all are very heavily indebted before they even arrive as the their agent brokers a loan to their families and then they are sent here with the sole purpose to work, work excessively in many different identities and in massive blackmarket labor rings or vice syndicates to pay back that debt.

Exposure of the blackmarket labour rings (711, spotless) or prostitution and vice rackets has shown these to be exclusively and extensively foreign student & tourist visas recruitment rackets in collusion with agents, brothel owners, the student or tourists family and also the colleges & institutes that tell the Foreign guestworker student this is ‘legal’ as long as they don’t excess their visa working hours…
It’s a farce. Same with 711 — all the Indians knew before they got to Australia they were stealing Australian jobs, breaching visas, signing 3 or more different names into timesheets a week – active collusion by the guestworkers, agents, colleges, blackmarket labor rings & vice rackets.
They also breach false documents and health records (half the Indian records are shown as fake DIAC), they breach work rules, purpose in Australia, false declaration of funds and they breach morality, tax, and vice, corruption, blackmarket & other conditions of entry.

On top of this 1.7 million…

are another 60,000 declared illegals and another 129,000 lost, missing or suspect as well a special or other class visas.

I just want to know how the ones in Melbourne get around without using PT or walking and get their groceries without going to the shops, because no way are between 1 in 6 and 1 in 4 people (once you add in the ones that here completely legitimately) you see in Melbourne of Chinese descent.

Up to 1.5 million of these foreign guestworkers will be found to be fraudulent, only recruited here to steal jobs, work in major blackmarket labour rings or vice & prostitution.
…
Australian citizenry should also be given powers to stop, inspect and detain foreign guestworkers

I don’t think I want to stop any sweaty building guestworker or trolley collector, but inspecting a few vice workers might be tolerable.

It is just computers churning away spitting out bad news for anyone who has done the wrong thing. This is great news, should be self funding at least and will provide a massive smile for my face in 2016.

If you forget to declare $100 in interest in a bank account the ATO know …….if you illegally bought an Australian citazens home for $1.5 million they should also know …….so go for it ATO …….and I’m happy for you to use some of my tax money to do it ……..my children are waiting for all those forced sales so they as born here Australians might be able to afford a home in their own country ………..sorry to be so xenophobic ………but just can’t help looking our for my Aussie kids and their friends ………..terrible isn’t it !!……….

yup the switch is finally in, 90’s Gold Coast 2.0 baby! (except Australia wide) – our Gov is corrupt and full of sharks, just like us… hey, if it (our circular system of exploiting foreigners with dreams of citizenship and land) isn’t broken, why fix it??

Wish I could do the job. Love playing with data. 90% of the work is preparing the data before you do the magic thing. Hell, given enough data, one could develop a machine learning algorithm to estimate the probability that a certain transaction is illegal or not. Nobody can then claim discrimination out of it when the “Chinese” owner variable greatly contribute to the increased probability value.

I would get the ATO to demand that all the listed authorities to adhere to the same set of data structure, all linked to a centralised cloud storage and have the algorithms automatically analyse and output the results on a daily basis to find those that are considered high risk.

Just write four or five separate scripts which can run over half a dozen different formats with at least a dozen storage types in each would cover almost every conceivable storage methodology and between the six scripts you would easily get a near perfect clean up of anything submitted.

You can be running batch files on servers, mail servers etc sucking in any new content continuously – automatically upload it and you are done.

Then have as many scripts as you want running over the data – you could write a script a day – six script writers could have several hundred scripts running in a few months – then combine this with their won tax data, banking data, etc and you will be churning out results in absolutely no time.

I forget the name of the team at the ANU who developed the data mining and matching architecture, but the prof who led the team has been working for the ATO for a few years now. It seems this is the culmination of a long standing plan by the ATO’ replacing field audits with data gathering. Nice.

To me, this is sweet and sour.
Funny how many people are gay about ATO’s 15yo late action promise.
Sure, better late then never but the irreversible damage is done and we are all to pay, ALL, in addition to what prudent were paying the last decade for being ‘stupid’.

Unless ATO is meticulously scrupulous and leaves no rock unturned and sets the rules that will tackle and eliminate future abuse of the system, it is all just a fart in the wind.

Borders Australia track over 573,000 overstay & missing or ‘reborn identity’ to give a scale to the issue – half a million or a third are involved in fraud, suspect activity or risk to Australia.

A guestworker visa is exactly that : a guest our country that has visa conditions allowing them to work.

Of these 1.7 million 335,000 are ‘student’ visas, 650,000 tourists (including 249,000 that were students churning or delaying departure by being a student then tourist then student), 200,000 457 visas, 650,000 NZ visas which includes over 330,000 non NZ born so basically a non Aust non NZ foreign guestworker.

There is no doubt – no doubt at all with extensive evidence that many if not most of these 1.7 million are here only to work and almost all breach their visa conditions to do this.

Many if not most are recruited in from the slums of Asia & India by racketeers and agents and doing literally 8 year old level ‘English courses’ they could do for free in their home country, or 14 year old ‘Vet or higher education’ courses specially dumbed down for the visa trade & collusion.

Most if not all are very heavily indebted before they even arrive as their agent brokers a loan to their families and then they are sent here with the sole purpose to work, work excessively in many different identities and in massive blackmarket labor rings or vice syndicates to pay back that debt.

Exposure of the blackmarket labour rings (711, spotless) or prostitution and vice rackets has shown these to be exclusively and extensively foreign student & tourist visas recruitment rackets in collusion with agents, brothel owners, the student or tourists family and also the colleges & institutes offical advice that tell the Foreign guestworker student this is ‘legal’ as long as they don’t excess their visa working hours…

It’s a farce. Same with 711 — all the Indians knew before they got to Australia they were stealing Australian jobs, breaching visas, signing 3 or more different names into timesheets a week – active collusion by the guestworkers, agents, colleges, blackmarket labor rings & vice rackets.

They also breach false documents and health records (half the Indian records are shown as fake DIAC), they breach work rules, purpose in Australia, false declaration of funds and they breach morality, tax, and vice, corruption, blackmarket & other conditions of entry.

On top of this 1.7 million…

are another 60,000 declared illegals and another 129,000 lost, missing or suspect as well a special or other class visas.